Foremost Income Fund
TSX : FMO.UN

Foremost Income Fund

May 18, 2006 12:45 ET

Foremost Implements Distribution Reinvestment Program and Increases Quarterly Distribution

CALGARY, ALBERTA--(CCNMatthews - May 18, 2006) - Foremost Income Fund (TSX:FMO.UN) (the "Fund") is pleased to announce an increase in the Fund's quarterly distribution, effective immediately. The Trustees have set the distribution at $0.40 per unit per quarter, a substantial increase from the existing level of $0.25 per unit per quarter.

The Trustees decided to increase the distribution to a higher percentage of distributable income, which is more in line with the Fund's investment industry peer group, as part of a program to increase the appeal of the Fund's units to a larger group of potential unitholders. At the same time, based on current budgets, this higher level of distributions still allows the Fund to retain adequate growth capital to finance its expansion program.

Recently, the Fund announced its intent to introduce a Distribution Reinvestment Program ("DRIP"). Under this DRIP, which is now being implemented, participating unitholders may reinvest distributions paid into units of the Fund, at a five percent discount to the then-prevailing market price (based on a 10 day weighted average). To participate in this DRIP, a unitholder needs to enroll at least 3 business days before the applicable record date (next record date is June 30th). The Fund will be mailing a copy of the DRIP in the near future to all registered holders of units, which includes information concerning how to participate in the DRIP and a number of question and answers regarding the DRIP. Beneficial holders of units should contact their broker to obtain a copy of the DRIP.



On behalf of the Trustees
Foremost Income Fund

(signed: J.T. Grenon)

James T. Grenon, Trustee


FORWARD-LOOKING STATEMENT

Certain statements in this release may constitute forward-looking statements involving known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Fund to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. When used in this release, such statements use words such as "may", "will", "expect", "believe" and "plan". These statements reflect management's current expectations regarding future events and operating performance and are valid only up to the date of this release. These forward-looking statements involve a number of risks and uncertainties, including: the impact of general economic conditions, industry conditions, changes in laws and regulations, increased competition, fluctuations in commodity prices and foreign exchange, and interest rates and stock market volatility. The Fund is not undertaking to update any forward-looking statements.


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